SAN DIEGO – Mortgage data provider DataQuick reported today that the median sales price for a Southern California home has dropped 41% from peak prices only 18 months ago. Price drops are being blamed on foreclosures, which are driving home sales. In fact, foreclosures accounted for more than half of all SoCal homes sold in October.
Western Corporate Federal Credit Union economist Dwight Johnston said California's unemployment rate has risen to 8%, and jobs will trump any foreclosure avoidance programs the government or private industry can create.
"The success of mortgage rework programs will depend upon what has happened to the borrower's income since they first bought the home," Johnston said. "You can't expect an institution to settle for 38% of gross income if gross income is zero."
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Foreclosure listing service Default Research reported today that South Florida foreclosures have risen 325% in the last 12 months. However, October foreclosures were down from September's numbers.
Default Research founder Serdar Bankaci said South Florida inventories have been falling for the past few months, and he expects home prices to stabilize by early 2009.
In addition to hope that a new administration will bring economic prosperity to the region, South Florida real estate is also being boosted by winter snow bird migration, which Bankaci said will also help.
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